Wisdom of Rich Dad

Robert Kiyosaki is an American investor, businessman, self-help author and motivational speaker, who has written 15 books, with combined sales of over 26 million copies.

Three of Robert’s books, Rich Dad Poor Dad, Rich Dad’s CASHFLOW Quadrant, and Rich Dad’s Guide to Investing, have simultaneously been on the top 10 best-seller lists of The Wall Street Journal, USA Today and the New York Times.

In this Q&A interview with Alex Pirouz, Robert Kiyosaki discusses what it takes to be successful in business, the No 1 skill every entrepreneur should learn and the five qualities required by every entrepreneur in order to become successful.

What does it take to be a successful entrepreneur?

It takes ambition and the desire to truly master the art and science of becoming a successful entrepreneur. And in my opinion ambition is far more important than brains, because if you have ambition you can always hire good brains.

What is your number one rule of thumb in business?

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The familiar question often investors face is: Stocks or bonds? The answer, unsurprisingly, is often wrong. Guess why? Because it was the wrong question to ask in the first place.

The stock market has always been risky way and is more so today, as the world braces for an impending recession. In times like these, even bonds carry a high risk. But all is not lost. All you need to do is think outside the box.

To avoid the perils of a tumultuous market, and to still keep your money safe, here are some alternative investments.

Classic Car

Are you a car enthusiast? If so, it may be time to put more money into this “hobby.” When you invest in “classic” cars you are getting the best of both worlds. Not only is this a lot of fun, but you are putting your money into an investment that is safer than the stock market.

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Author and business expert Robert Kiyosaki says: “Mistakes are priceless opportunities to learn essential lessons.”

We learn from our parents, our teachers, in our classrooms, but many of life’s greatest lessons are learned from experience.

Experiences allow us to gather invaluable wisdom that can only come from time and real-life situations. In fact, it’s often said that “experience is the best teacher.” But if at all possible, we should let the experiences of others be our teacher so we don’t have to repeat their mistakes.

However, as much as we want to do things right and live with no regrets, mistakes are inevitable. When you realize you’ve made one, be upfront and honest with yourself. If you spend time trying to deny what you did wrong, it’s easier repeat the mistake, perhaps thinking the next time around you’ll have a different outcome.

Even though previous negative choices can make you feel weighed down with emotional baggage, try not to hold on to the past. Sometimes we can spend so much time dwelling on our past, we leave no room to enjoy our present and be hopeful about our future. Don’t dwell on your mistakes. Simply shake the dust off your feet and move on by learning from your experience.

“Every failure brings with it the seed of an equivalent success,” Napoleon Hill said.

In fact, did you know we are physiologically wired to avoid making the same mistakes over again? Psychologists from the University of Exeter have identified an early warning signal in the brain that helps us avoid repeating previous mistakes. Their research shows that there is a mechanism in the brain that reacts in just 0.1 seconds to things that have resulted in us making errors in the past, thus causing us to instinctively avoid repetition of negative behaviors.

After a series of experiments, researchers found out whether people believed they could learn from their mistakes. People who think they can learn from their mistakes did better after making a mistake. In other words, they successfully bounced back.

You can’t undo the past, but you can change the present and the future. With time and prayer, your broken heart can be mended and your life can be transformed into something beautiful.

“Look up and not down; look forward and not back; look out and not in.”

Graduating from college with thousands of dollars in loans is a heavy burden. But take heart: A loan-forgiveness program can lighten the load. Note, however, that most programs cover only federal student loans. And if the program does not involve a work requirement, the amount forgiven is generally considered taxable income.

1 Sign up for the income-based repayment plan. For borrowers with high debt relative to income, monthly payments are reduced, and any remaining debt is forgiven after 25 years. The Obama administration has proposed shortening the time frame to 20 years.

2 Work in a public-service job. Any remaining debt will be forgiven after you have worked full-time in public service for ten years and made 120 payments, beginning on or after October 1, 2007. You benefit only if your payments have been reduced through an income-linked repayment plan. Student loans must be made through the federal Direct Loan program — as opposed to private lenders, such as Sallie Mae — but you can get around this restriction by consolidating your loans into the Direct Loan program. For details on both income-based repayment and public-service loan forgiveness go to www.ibrinfo.org

3 Work in an underserved area. If you enter a profession such as teaching, health services, social work or clinical research, you could qualify for loan forgiveness through one of several programs. But before you make a years-long commitment, be sure the program has the resources to make good on its promise.

4 Work at a national service organization. A stint in AmeriCorps or its member organizations, including Vista, makes you eligible to receive a Segal AmeriCorps Education Award, worth up to $5,350 in 2010. You can use the award to pay for further education or to repay your student loans. The Peace Corps also rewards you for service by canceling up to 70% of federal Perkins loans.

For more information, go to www.finaid.org/loans/forgiveness.phtml.

The last couple weeks have been a zoo in Washington, showcasing much of what is wrong with our country, our politics, and our economy. It’s said that as Rome declined, the emperors said, “Give them bread and circuses.” Feed the populace and entertained them, and they’ll never revolt—until you run out of bread. People can live without entertainment, but they need bread.

Sadly, our government is the circus, and many people are starting to get hungry.

Yesterday, the house has passed a compromise bill to raise the debt ceiling that has no details and opens the way for a potential historic lobbying effort as the rich and powerful get ready to fight for the scraps of government funding.

But I don’t need to point out how dysfunctional our government is to you. The whole world knows by now.

Instead, I’m going to focus on another dysfunction—the college education system.

Huffington Post, reports that in an effort to pay for college, many young women are exchanging sex for tuition with dirty, old, rich men.

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I grew up next to a forest. I remember, as a child, hiking through the trees with our two golden retrievers in tow and, hilariously, panning for gold in the stream. I started with high hopes. I saw plenty of gold — all fool’s, alas.

Investors, too, have been hunting for riches in the forests — and these days, they’re also seeking shelter there. Market guru Jeremy Grantham, whose investment firm, GMO, has historically been bearish about stocks, keeps a large chunk of his personal portfolio in timber — seeing it as a valuable defensive investment in a tumultuous market like this one. For similar reasons, Harvard University has invested in timberland for many years. And Boston financial-services giant John Hancock owns 5.3 million acres of timberland around the world on behalf of institutions and rich clients.

There are good reasons for all this interest. The correlation between timber and other assets is low, which means timber is not very likely to lose value when, say, stocks are tumbling. Over the past two decades, the benchmark timber index, tracked by the National Council of Real Estate Investment Fiduciaries, has produced a tenfold return.

And it’s a steady performer in tough economic times. As Grantham once wrote, timberland “has had a history of rising in all great equity bear markets.” He adds that it’s “very safe: If the sun shines and it rains, the trees grow about on schedule.”

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